(MENAFN- KNN India)
Coimbatore, Sep 11
(KNN) In a pivotal meeting held on Tuesday, representatives of Micro, Small, and Medium Enterprises (MSMEs) from various industrial associations in South India met with officials from the Ministry of MSMEs to voice their concerns and demands.
Ishita Ganguli Tripathy, Additional Development Commissioner at the Ministry of MSMEs, participated in the interactive session, aimed at addressing the pressing challenges faced by the sector.
One of the key issues raised was the high Goods and Services Tax (GST) rates, which the industry representatives claimed were driving a significant portion of businesses into the unorganised sector.
Mithun Ramdas, president of the Southern India Engineering Manufacturers' Association, highlighted the adverse impact of an 18 per cent GST on pumpsets.
He pointed out that the unorganised sector, previously valued at Rs 3,000-Rs 5,000 crores, had now grown to Rs 15,000 crores due to the elevated tax rates.
The organised segment of the pumpset industry, worth Rs 25,000 crores overall, has shrunk, with many businesses opting to avoid the higher tax burden.
Ramdas also noted the logistical challenges faced by industries in South India, particularly with regard to the transportation of raw materials from northern states.
The National Small Industries Corporation (NSIC) raw material scheme, which was expected to alleviate this burden, was deemed ineffective as it required advance payments and bank guarantees-something many MSMEs found difficult to provide.
The textile sector also voiced its concerns. Representatives from textile mills demanded that raw materials like cotton and manmade fibers be made available at internationally competitive prices.
Currently, they claimed, Indian prices are higher, placing them at a disadvantage in global markets.
K. Veluswami, chairman of the Institute of Indian Foundrymen, Coimbatore, raised the issue of GST on specialised tools used by foundries and engineering firms for exports.
Tools, which are crafted to meet specific international orders, have recently been subjected to an 18 per cent GST and a penalty on backdated orders, a change that has created financial strain.
J. James, president of the Tamil Nadu Association of Cottage and Tiny Enterprises, stressed the need for GST relief for job works, urging a reduction to 12 per cent, or the introduction of tax deductions at source for micro units working with larger industries.
He also advocated for a separate classification for micro and tiny enterprises, which he argued were being overlooked under the current MSME schemes.
The meeting provided a platform for the industry to make its case, with hopes of government intervention to address their concerns.
(KNN Bureau)
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